Various federal proposals being considered may also ultimately provide opportunities for increasing purchase of private long term care insurance including:

1. Restructuring Medicaid, including possible repeal/elimination of 1993 OBRA requirements governing estate recovery provisions and, in particular, estate recovery provisions pertaining to Long Term Care Insurance Partnership programs.
2. Clarification of tax treatment of long term care insurance premiums and unreimbursed long term care expenses to include these expenses as allowable medical expenses for the purpose of calculating a tax deduction for medical expenses for individual taxpayers.
3. Possible inclusion of Medical Savings Accounts (MSA's) combined with high-deductible allow major medical insurance as a coverage option for Medicare beneficiaries. Such an option could allow for payment of long term care insurance premiums with MSA funds by enrollees choosing this health care coverage option.
4. Possible passage of legislation regarding federal requirements for Medical Savings Accounts for the general population including defining payment of long term care insurance premiums as an allowable medical expense to be paid from MSA funds.

(Note: A Congressional Conference Committee will meet to reconcile differences between health care reform related bills passed by the House and Senate. The House bill [HR 3103] included Medical Savings Accounts while the Senate bill [SB 1028] did not.)

This report was prepared by Susan Harmuth and Dennis Streets of the Division of Aging, NC Department of Health and Human Resources, 693 Palmer Drive, Caller Box No. 29531, Raleigh, NC 27626-0531. Please contact them regarding this summary or for copies of the full report.

The online version was prepared by Margaret Morse, Center for Aging Research and Educational Services, School of Social Work, University of North Carolina, Chapel Hill.